Mini close-out - GMSLA Provision
Commentary
Mini close-out is the method of terminating an individual Loan under a 2010 GMSLA or an 1995 OSLA where there is a settlement failure without actually closing out the whole agreement. It is also a useful tool in getting optimal netting analysis in gross jurisdictions, but that is not what the clause was inserted to do.
In a nutshell (and more detail can be found at GMSLA netting the idea is to call each loan (under a Borrower or Lender's general right to do so under Paragraph 8) before designating an Event of Default under Paragraph 10 and effecting close out under paragraph 11. Note some deft manouevring is required to get mini-closeout to work where you have term Loans in your portfolio (that is, Loans which are not callable at will under paragraph 8) or where automatic early termination applies.
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